Serbia divided over EU lithium plans

The situation in Russian friendly enclave of Serbia remains unstable for the second consecutive month. Tens of thousands of people have taken to the streets of Belgrade and other cities across the country to protest against a project to develop a large lithium-containing mineral deposit that could make Serbia one of the world's most important players in the promising lithium market, one of the key metals in the green economy.

Under  intense pressure from the European Union, Serbia's leadership has given the green light to the development of a large lithium deposit. However, there is serious  resistance from the general public, who are unwilling to pay for Europe's green ambitions at the expense of their ecosystem.
One of the key concerns among the general public is the environmental impact of the project. Serbian President Aleksandar Vucic, relevant ministers and Rio Tinto, the international operator, maintain that the mine's development and extraction of lithium carbonate, the raw material for lithium-ion batteries, the dominant type of energy storage for electric vehicles and wearables, will be carried out in accordance with the best available technology and the strictest environmental regulations of the EU (though Serbia is not formally a member).

However, the detailed analysis and assessment of the project's environmental impact, which is extensively covered on the Rio Tinto website, has not been a significant point of interest for the general public. The arguments put forth by the project's supporters are outweighed by the fact that two EU countries, the Czech Republic and Germany, have lithium reserves that exceed Serbia's (the latter by a factor of three), yet have refrained from developing them for many years. Precisely for environmental reasons. Furthermore, Rio Tinto's reputation for caring for nature and cultural monuments in the countries where it operates is, to put it mildly, not impeccable. 
Now before I continue I would like to make an appeal,if you like and enjoy my videos you can help me fund the channel and my websited sco brics insight .com and to further develop it. You can do this by making a small donation which you can do by clicking on the thanks button at the bottom of the video screen. Everybody who donates does get a personal thank you from me.

 It is becoming increasingly evident that the level of civil unrest among the Serbian population has reached a point where rational arguments are unable to calm people down. Instead, they are perceived as excuses and further fuel the fire of protest activists.
The authorities are taking a more proactive approach than simply exhorting. Following a significant gathering in the Serbian capital on 10 August, law enforcement officials questioned over forty environmental activists on suspicion of plotting against the country's constitution and conducted searches of their residences. The protesters viewed this as an unlawful crackdown and intensified their efforts. Last week, rallies and demonstrations spread to Valjevo and other regional hubs in the western part of the country.

The inconsistent approach of the Serbian authorities to the ambitious lithium project has added an element of uncertainty to an already complex situation. The project has been approved and then banned, succumbing to pressure from the public and considerations of the current domestic political situation. This lack of clarity has eroded trust in politicians and caused frustration among the public.
Mr. Vucic is in a position where he has no viable alternative course of action. The EU is placing a significant investment in tothe Serbian lithium project. The EU currently sources the majority of its battery-grade lithium from external suppliers, and is seeking to diversify its supplier base. Furthermore, it provides a unique opportunity to relocate environmentally hazardous production outside the EU.

It should be noted that Germany has brine lithium deposits, which can be extracted by simple evaporation. This is in contrast to the ore deposits in Serbia, which require the treatment of the ore with large quantities of sulfuric acid (an alternative Russian technology using ammonium bisulfate instead of acid has not yet been industrially tested) and inevitably result in millions of tons of ore waste.
Therefore, the aforementioned Serbian lithium production will inevitably be more environmentally costly than the German option, which has not been subject to the same level of scrutiny. It is worth noting that while German officials and citizens advocate a green economy, they are reluctant to accept the inevitable costs associated with this transition.
The objective of Brussels is to prevent China, which has substantial economic interests in Serbia, from accessing the valuable raw materials assets in Europe's less developed regions. During his European tour in May of this year, Chinese President Xi Jinping visited Belgrade, Paris and Budapest, where he announced that Serbia was to become "China's first comprehensive strategic partner in the Central and Eastern European region".
China is also keen to gain access to Serbia's raw material potential. The Chinese mining company Zijin Mining Group has two copper projects in Serbia. Lithium represents an even more valuable opportunity. In an interview with the German business newspaper Handelsblatt on 17 July, Aleksandar Vucic stated that the Chinese had expressed interest in accessing lithium deposits. We informed them that this matter is currently under discussion with the European partners. "We remain committed to our European partners."

In light of the aforementioned developments, it is unsurprising that German Chancellor Olaf Scholz himself travelled to the Serbian capital on 19 July to sign a memorandum between Serbia and the EU on a strategic partnership in the field of environmentally friendly raw materials, accompanied by officials from the European Commission. The EU has a clear advantage in the lithium sector, where it can offer Serbia a mutually beneficial partnership. In contrast, the EU's approach to other controversial issues, such as Kosovo's independence and Serbia's anti-Russian sanctions, has been less successful.

The EU has only been able to persuade Serbia to comply with its demands through the threat of sanctions and the promise of integration into the European Union. However, the potential benefits of the lithium partnership are more tangible. According to Serbian Finance Minister Sinisa Mali, the implementation of the project will add €10-12 billion to the country's annual GDP, which in 2022 was estimated at €64 billion.
In addition, Vučić insists on maximum localization of the entire lithium technological chain in the country - from raw material extraction to battery production and their use in new electric vehicle assembly facilities in Serbia. However, no specific binding agreements on this matter have been signed with the EU or any of its member states yet. The 13-page memorandum of July 19 is purely a framework with the only obligation to develop a roadmap for cooperation.
The history of Serbian lithium began almost twenty years ago, when in December 2004, a geological exploration party of the Anglo-Australian transnational mining company Rio Tinto, searching for boron and shale, discovered an unusual mineral during exploratory drilling in the Jadar River valley in western Serbia. This mineral was identified as sodium lithium boron silicate hydroxide. In human terms, this means two valuable substances in one bottle. Lithium is used in batteries and is also needed for special alloys. Boron, for example, is used to strengthen smartphone screens and fibre optic threads. The mineral was named jadarite based on its place of discovery. Rio Tinto then began work on assessing the reserves of the deposit and the technological scheme for its development.

The design documentation produced by Rio Tinto indicates that the Jadarovo mine will produce 2.32 million tons of lithium carbonate over the 40-year planned life of the deposit, equating to 58 thousand tons per year. This would position Serbia as a significant player in the global lithium market, ranking second only to Australia. This raw material is sufficient to manufacture batteries for 1.1 million electric vehicles, representing 17% of the current European output.
In 2017, the company entered into a memorandum of understanding with the Serbian government regarding the implementation of the Jadar project. In addition to representatives of the contracting parties, the working group that prepared it included Stephen Ndegwa, who was the World Bank Director in Serbia at the time. Additionally, Alan Duncan, the British Minister for Europe and the Americas, and Matthew Palmer, the former US Special Representative for the Western Balkans, expressed their support for the project. Scholz's predecessor as German Chancellor, Angela Merkel, also expressed public interest in the potential of Serbian lithium.
However, the project has not yet gained significant public support in the domestic market. In 2021, Serbia experienced civil unrest in response to the government's decision to proceed with the construction of lithium mines, resulting in road and bridge blockades. With parliamentary elections scheduled for the following year, the ruling Serbian Progressive Party faced the prospect of losing its majority in the Skupština, the country's unicameral parliament. In January 2022, the Serbian government revoked Rio Tinto's licences to develop the Jadar project.
However, the company did not withdraw from the country. Furthermore, the company continued to purchase properties in the vicinity of the proposed mine, employing a strategy of "small good deeds" in relation to residents of nearby villages. For instance, they provided sports equipment to a local school and purchased two diagnostic machines for a local hospital.
To date, Rio Tinto has invested over 600 million dollars in exploration, the development of a technological scheme for the project, the purchase of land and real estate in the area of the future mine, and other expenses related to engaging with the local community. Meanwhile, the total estimated capital expenditure for the project is 2.4 billion dollars.
On 24 June, Ana Brnabić, Speaker of the National Assembly of Serbia, expressed her support for the country's lithium mining industry. She highlighted the potential benefits of this sector, stating that it would be a missed opportunity to forego such an opportunity, given the strategic importance of lithium as a 21st-century commodity. Furthermore, this is the same Brnabić who, in January 2022, as Serbian Prime Minister, definitively stated that "the final point has been made in the history of Serbian lithium."

The level of opposition intensified. On 1 July, representatives of the civic association Ne Damo Jadar (We Will Not Give Up Jadar) submitted a request to the government demanding a legislative ban on geological exploration and extraction of lithium and boron in Serbia. The request was accompanied by 38,000 signatures in support of this demand. Mr. Kokanovic, the association's spokesperson, stated that if the government did not respond within the 40-day period, the group would intensify its protests on August 10.
On 11 July, Serbia's Constitutional Court ruled that the government's January 2022 ban on lithium mining was unconstitutional. A week later, the government reinstated the original spatial plan for the future mine site and renewed Rio Tinto's licences to develop the Jadarite deposit.

On 10 August, Ne Damo Jadar proceeded with its threat, despite the high temperatures – exceeding 40 degrees in the shade – with tens of thousands of demonstrators taking to the streets and squares in the centre of Belgrade. In addition to environmental activists, large numbers of ordinary citizens also took part in the protest, driven by fear of the unknown. "Many of them support Russia and are reluctant to accept either Western or Chinese investments," states Ekaterina Entina of the Russian Academy of Sciences. "It is unacceptable for them that in a situation where the world is turning and Serbia has the opportunity to escape Western pressure and economic control, the Serbian leadership is signing documents that are of strategic importance for the national economy."
Mr Vučić was visibly uneasy as he made the public announcement on the eve of the Belgrade protests on 10 August. He alleged that a "coup d'état is being prepared" in the country and that the information about this was passed to him by none other than "through official Russian channels". On the previous day, 8 August, the official representative of the Russian Foreign Ministry, Maria Zakharova, made a similar statement: "An analysis of the current situation in Serbia indicates a resumption of attempts by certain malicious forces to activate a well-known destructive arsenal in order to destabilise the domestic political situation in this country."

While the pro-Western opposition in Serbia is undoubtedly seizing every opportunity to challenge the status quo, the involvement of the West, particularly the United States, in the protests against the development of lithium deposits is likely not driven by a desire to swiftly remove Vucic. "Instead, it's a strategic move to exert pressure on him on the Kosovo issue, demonstrating that delay could have significant political consequences," states Ekaterina Entina.

Vucic is adopting a long-term strategy with the EU, utilising a range of bargaining chips to negotiate and exchange. The ingredients of this challenging Balkan situation are a firm stance on Kosovo's status (refusal to officially recognise the self-proclaimed independence of the autonomous region, on the one hand, and the willingness to concede on numerous issues related to the daily lives of Kosovo Serbs, on the other). Furthermore, he has distanced himself from anti-Russian sanctions, with Serbia and neighbouring Bosnia and Herzegovina being the only countries in Europe to avoid restrictions on individuals and companies of the Russian Federation. At the same time, he has allowed the supply of Serbian-made weapons through third countries to the Armed Forces of Ukraine. How long will Aleksandar Vucic be able to navigate between the conflicting parties without losing the support of his citizens?